Bluetooth and location settings

Just got the apple watch and in order for them to work together I understand bluetooth has to be enabled on the iPhone.

I have never used bluetooth on my iPhone so I have a couple of quick questions.

1) when I turn on bluetooth I get a little outline of an arrow next to it. I assume that's something to do with location services. Normally when a location service is used that arrow would be filled in and not an outline. Is this normal and required for the watch and phone to work together. If not is there any way to turn off the location services bit when Bluetooth is turned on.

2) what type of impact does having the Bluetooth and the location services bit being switched on all the time on the battery.

Sorry if these questions have been asked before but I have searched the forums and can't seem to find the answers.

Thanks.

 

this is what i mean...
the first one is when bluetooth is activated but not connected to the apple watch
the 2nd pic is connected to the apple watch
and the 3rd pic is connected to the apple watch and using an app with location services.

are theses 3 scenarios and their icons what is supposed to happen?

also iv had bluetooth on all day and notice battery drain quicker. is this normal as i have nothing to compare battery life to before when not having bluetooth turned on.

 

the only app i can see that might use the geo fence is the apple store app. i have turned the location services to off for that app and the arrow icon has now gone and the bluetooth one is still on.

going to see if this improves battery life. I've been searching online and theres something about ibeacons. does that have anything to do with bluetooth and location services.